Consumer spending outlook remains gloomy

Monday 10 January 2011

Article by Mozo

Continued interest rate rises this year will further dampen consumer spending and severely hinder the retail industry, it has been claimed.

Consumer spending outlook remains gloomy

According to new Australian Bureau of Statistics data, November 2010 saw a 0.3 per cent increase in retail figures, up on the revised October drop of 0.8 per cent.

However, the Australian National Retailers Association (ANRA) described the result as an anomaly, noting that the two lowest year-on-year increases since 2005 were recorded in 2010, illustrating the challenging year retail faced.

"Massive discounting and a bounce off the October drop must account for much of this increase," said Margy Osmond, chief executive officer of ANRA.

"It is far too early to suggest that retail can sustain growth with continued interest rate rises and we would put the Reserve Bank on notice not to read too much into these numbers."

Consumers aiming to boost their spending power this year could choose to compare debit cards and other money products in search of the best deals. News of the new retail data comes as a coalition of major retailers increased its calls for an end to tax exemptions for purchases from foreign websites worth less than $1,000.

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